A key U.S. trade official lashed out at the declining state of U.S. transportation infrastructure Wednesday, saying “we can and must do better” to improve highways, bridges and other components of the system to encourage greater exports.
“The declining state of our infrastructure is an increasing challenge and long-term deficiencies hinder freight flows,” Francisco Sanchez, Under Secretary of Commerce for International Trade, said at the SMC3 Connections 2012 conference Wednesday.
Lack of infrastructure investment could imperil the Obama administration's long-term goal to double exports by 2014, a target already threatened by a weakening global economy, even as U.S. manufacturers increase output.
Durable goods orders rose 1.1 percent in May after two straight months of decline, with orders for transportation products up 2.7 percent, the Department of Commerce said Wednesday. Orders for capital goods increased 1.6 percent, a sign of investment.
Exports slipped in April, however, although the amount of goods shipped overseas from the U.S. remained at near-record levels. U.S. exports to the European Union dropped 11.1 percent in April as fear over a deepening debt crisis chilled the EU economy.
Sanchez pointed to an Economist projection that exports would have to grow 14.9 percent a year from 2009 through 2014 to meet the president’s expansion goal. “In Year One (of the policy), exports grew 17 percent, and in Year Two, 14.9 percent,” he said.
“I am concerned that in Year Three we might not see such numbers,” Sanchez said.
Journal of Commerce Economist Mario O. Moreno lowered his 2012 estimate for growth in containerized U.S. exports from 3.5 percent to 2.3 percent. Exports are expected to total 12.714 million TEUs this year, compared with 11.9 million TEUs in 2011.
Sanchez, who heads the International Trade Administration, said the Obama administration is working on a cross-agency program to enhance U.S. supply chain competitiveness, working closely with the Department of Transportation.
“We have a laser beam focus on these issues” at the Department of Commerce, Sanchez said at the conference. “We recognize that transportation and logistics are key to buying products, building products, moving products and selling them.”
There are some things the administration cannot control, however. One is Congress, which is seemingly deadlocked in its efforts to pass a multi-year transportation spending bill. The extension of the 2005 transportation act passed its thousandth day June 26.
Another is the global economy. Sanchez said “headwinds” from China and Europe threaten export targets, while pointing to progress following trade agreements with South Korea and Colombia and new developing markets.